Toll Brothers Q4 Beats Expectations, But Guidance Leaves Analysts Cautious

Shares of Toll Brothers Inc (NYSE:TOL) fell in early trading on Tuesday, even after the company reported upbeat fiscal fourth-quarter results.

The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.

Goldman Sachs On Toll Brothers

Analyst Susan Maklari maintained a Neutral rating and price target of $149.

Toll Brothers reported its quarterly earnings, ex-charges, at $4.81 per share, higher than consensus of $4.34 per share, with the outperformance being "driven by the HB EBIT margin," Maklari said in a note. The company delivered despite a tough operating backdrop, with rates rising through the quarter, she added.

The quarterly performance reflects "the financial profile of Toll's core, luxury buyers as well as company efforts to bring more affordable units to the market," the analyst wrote. However, Toll Brothers guided to fiscal 2025 deliveries of 11,400 units at the midpoint and gross margins of around 27.3%, short of expectations, she further stated.

Check out other analyst stock ratings.

JPMorgan On Toll Brothers

Analyst Michael Rehaut reiterated an Overweight rating on the stock.

Toll Brothers' guidance for the first quarter of fiscal 2025 shows adjusted gross margins contracting by 160 basis points (bps) sequentially, "which we believe may fall short of investor expectations," Rehaut said.

The full-year guidance for adjusted gross margins of 27.3% is down 110 bps, he added. Management's guidance for the full year reflects closings of 11,200-11,600 and ASPs (average selling price) between $945,000 and $965,000, the analyst further stated.

Oppenheimer On Toll Brothers

Analyst Tyler Batory reaffirmed an Outperform rating on the stock.

Toll Brothers reported revenues of $3.33 billion, higher than consensus of $3.17B, Batory said. Net orders were the "strong spot" at 2,658, versus consensus of 2,423, he added.

The company's first-quarter gross margin guidance came in "worse than our model," the analyst stated. Since the start of fiscal 2025, Toll Brothers has witnessed robust demand and is well positioned for growth "considering community count is expected to be up 10% YoY," he further wrote.

Keefe Bruyette & Woods On Toll Brothers

Analyst Jade Rahmani maintained a Market Perform rating and price target of $164.

Toll Brothers delivered a gross margin beat, with higher-than-expected deliveries, Rahmani said. Orders grew by 30% year-on-year, versus the Street’s 19% estimate, he added.

The midpoint of the first-quarter deliveries guidance of 2,000 units implies estimated earnings of $1.87-$2.07 per share, lower than consensus of $2.34 per share, the analyst stated. "We expect the shares to be down modestly on weaker-than-consensus 2025 outlook, despite stronger 4Q earnings and orders," he further wrote.

TOL Price Action: Shares of Toll Brothers were down 5.9% to $147.14 at the time of publication on Tuesday.

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